Lloyds fined for “serious misconduct”

<p>Lloyds have been fined £218 million over Libor rate rigging.</p>

Lloyds Banking Group has been fined for "serious misconduct" as part of the London interbank offered rate (Libor) rigging scandal.

The bank was found guilty of manipulating some key interest rates such as the Libor for the yen and sterling while attempting to rig the rate for yen, sterling and the US dollar, according to the US legal order. Lloyds has now been ordered to pay another £8 million as well as the £218 million in Libor fines.

Following the revelations, Lloyds has been accused of unlawful behaviour by the Bank of England with governor Mark Carney stating that Lloyds' action could "amount to criminal conduct on the part of the individuals involved". The bank, which is 24 per cent taxpayer-owned, was also found to have exposed a new form of manipulation which resulted in the extra £8 million being paid to the Bank of England.

Lloyds' fine represents the third largest ever handed out by the Financial Conduct Authority (FCA) and covers two main areas, the rigging of Libor and manipulation of another rate, known as the repo rate. The former has already been levied against seven other institutions but the latter is completely new and resulted in Lloyds' additional fine.

There has been considerable anger from the Bank of England after Lloyds was one of the main beneficiaries of the special liquidity scheme (SLS) which was designed to help banks endure the credit crisis of 2008. Lloyds TSB stepped in to save the owner of Halifax and Bank of Scotland (HBOS) with around £20 billion of taxpayer money being used in the enlarged bank.

After the FCA fine was handed down Lloyds stated that it had suspended seven employees who were involved in the scandal. There was a total of 22 people understood to be involed in benchmark manipulation and have since left the bank.

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